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Don’t Panic

Index Summary

Investors are selling the market broadly this morning and I’ve had several phone calls/email mails/drop-by visits from clients and others who want to know if they should just sell everything.

Its too early to know what exactly will happen with the fiscal cliff and other important issues during the coming lame duck session of government before the new and returning players are sworn in a few weeks from now.

However I can tell you that the one important rule to remember in investing is: DON’T PANIC. Selling into a market retreat like this is a bad decision.

Another important rule that I follow is: DON’T INVEST YOUR POLITICS. In the coming four years, there will be winners and there will be losers as government policy is shaped to reward certain industries and punish others – it happens with every administration, R or D, so the coming four years will be no different.

I am working on a strategy piece that will spell out what I think will be those winners and losers over the next four years based upon where government policy will likely head. I’ll get that published on the blog in a day or two, so my best advice to anyone is not to make wholesale investment changes the rest of this week. Things will be volatile as people who do not follow the second rule above will tend to then not follow the first rule above.

I’ll be back to you with thoughts on how portfolios need to be positioned, but until then, please let things play out until the beginning of next week at which point the post-election reaction swings will hopefully have played out and we can see where opportunities exist based upon thoughtful analysis.

Until then, DON’T PANIC.

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